James Hardie Industries (JHX)

James Hardie
’s share price has been trending the same way as the US housing market – down. While the group has a commanding position in the US fibre-cement building products sector, house prices continue to fall, which means American homeowners are still reluctant to renovate their homes and James Hardie is heavily exposed to the upgrade and renovations market segment. It surprised the market earlier this year with a stronger than expected full-year result. Excluding asbestos liabilities, corporate regulator actions, company and director tax adjustments, it posted $US116.7 million ($108.6 million) in operating profit. The group plans to restore a capital management program that will pay up to 30 per cent of net profits as shareholder dividends for the first time in three years. Merrill Lynch said balance sheet concerns had been allayed following the reinstatement of a capital management program but it remains cautious on any near-term US housing starts recovery.